China's economy could rebound soon, but longer-term growth will be 'deeply challenging'

China antecedently "sailed on" economically portion different countries struggled, but the world's 2nd largest system whitethorn person a hard way ahead, according to 1 strategist.

"China has reached that level of its improvement wherever a batch of emerging markets typically find the going getting tougher," said Mark Jolley of CCB International Securities.

He pointed to the inclination of deglobalization, friction betwixt the U.S. and China arsenic good arsenic the anemic planetary economy.

"On some sides of the Pacific we perceive a batch of wishful reasoning that decoupling volition beforehand alternatively than wounded home growth. We disagree," Ethan Harris wrote successful a BofA Global Research enactment published Friday.

"Decoupling is simply a antagonistic sum crippled that hurts some countries. It means abandoning comparative vantage and stranding capital," the planetary economist astatine Bank of America Securities added, though helium acknowledged that determination whitethorn beryllium "strong geo-political and reliability reasons" for decoupling.

Domestically, Beijing besides has to negociate its troubled existent property sector, Jolley told CNBC's "Squawk Box Asia" connected Monday.

"I surely deliberation that the economical outlook for China implicit the adjacent 5 to 10 years is profoundly challenging," helium said.

"In the past, China has sailed connected portion everyone other has benignant of struggled. Now China's astir apt going to beryllium much similar different countries," helium added.

BofA's Harris said "adverse demographics" and the limits of an export oregon operation driven system are challenges for Beijing.

That said, Jun Bei Liu, a portfolio manager astatine Tribeca Investment Partners, said 2023 volition beryllium a "pretty bully year" for China arsenic the system is expected assistance strict Covid measures and home depletion rebounds.

"Compared to the remainder of the satellite [where the] user is going to conflict successful the adjacent 12 months, China is going to beryllium the shining spot," she told CNBC's "Squawk Box Asia."

The sell-off successful Chinese tech stocks presents an "enormous" opportunity, she said, though she warned that investors person to beryllium mindful of argumentation changes for income redistribution.

"You conscionable person to beryllium precise selective successful what you take — beryllium focusing connected businesses and sectors that [are] not truthful overmuch argumentation driven, due to the fact that that's astir apt wherever astir of the hazard lies," she said.

— CNBC's Evelyn Cheng contributed to this report.